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Agency Survival: Which agency sector will survive

Which discipline-specialist agencies will be the first to die out?

MEDIA

Chris Ashworth, head of strategy, Feather Brooksbank

Dodo or tiger?

A weird steroid enhanced chicken on Darwin’s scrapheap or one of the kings of the grasslands?

Easy, until you remember that a third of the tiger species are extinct and the rest are endangered; big teeth and sharp claws are no guarantee of success when the world changes around you.

Media agencies have certainly got big teeth and sharp claws, as the media owners will attest. Good agencies realise this isn’t enough – we’re in the communications business, not the media business.

Our job is to get a message to a customer in a way which causes them to act.

The 25x4 in The Sun is not the end point; understanding customers, the world they live in and how they’re likely to react when they see that ad, is. The good media agencies have reinvented themselves as communications planners.We’ve invested in research tools and tracking systems, we know who the customers are, what they relate to and what they do. And, we’ve got data to prove it.

We make communications efficient and accountable and as marketing takes its seat at the boardroom table, that’s always in demand. Sure, some ad agencies are going full service, but clients tell us they want an impartial view of the opportunity, unswayed by the creative director’s need for a trip to Cannes.

Communications planning has evolved the media agency tiger and we know when to pull the claws in. We’re thriving in this new world and becoming more profitable than ever before.

However, the last of a dying species is now in front of us and its time for a dodo-burger. Who gets the bullet, I hear you ask. And the answer is media agencies.

Not the ones I’ve just talked about, who have embraced customer understanding and joined this with buying skills and the ability to measure and forecast.

The others, you know, the traditionalists who believe that if you shove enough out there, some of it will stick. Some of them, (gasp!), are in the online space and believe that their particular channel is somehow separate to the rest of the communications world. Specialist search agencies are most at risk.

I said it earlier on: the customer is the important thing not the medium.

To make that customer act you need to plan from their perspective and understand how advertising messages will take them on a journey. Optimising the search campaign and managing the press schedule is all well and good, but unless you understand how customers are consuming them together then you haven’t got long left.

The new digital world of customers and communications will kill off agencies who don’t plan in an integrated way. Understand your target, understand what they’re interested in, plan your media to engage and move them to a point of action, optimise that media between channels to make each more efficient and cost effective, then get the claws out and buy well. Finally, measure it all, prove that what you said would happen happened, and start again.

If you’re a media agency (and that includes those plying their trade in an online space) and you can’t do all of these things, then its time to join the dodos and let the new breed of tigers take over.

 

DESIGN

Martin Carr, managing director, True North

The blurring of boundaries between different agencies isn’t a good thing for any of us.

I can not comprehend how any one type of agency can be the best provider of a range of services. By becoming Jacks of all trades we automatically diminish our ability to present ourselves as experts in any given field.

True North will always be a design consultancy. As such we would suggest that we have the people, experience, talent and methodology to provide branding, visual identity and communication solutions.

It doesn’t mean that we can position ourselves as ‘media neutral solution providers and ideas generators’. That is the premise on which one-stop shops generate any combination of brand identity, advertising, DM, PR etc etc solutions.

It very well may be that for certain types of clients a one-stop shop is a cost-effective solution. But it won’t get them the best from any one discipline and it therefore means they won’t be the kind of client we are likely to work with.

Why should design consultancies survive? Simple. The skill set that allows designers to create brands at their conception gives us an unarguable advantage over any other ‘deliverers of brand messages’. Advertising, PR, DM, Media...these are all methods that are employed to communicate or publicise a brand essence and differential.

But, the place where that brand essence and that differential are given shape - the white-hot furnace that forges the brand - that is the domain of the designer. And guess what? Having forged brands, designers are able to contribute to communicating them effectively via the aforementioned channels.

Good designers can create advertising for brands they have created. Design directors can direct PR specialists in the development of brand communications.

But do PR practitioners forge brands? No. Are advertising copywriters there at the conception of the brand?

I would argue that clients can only get the very best return from working with experts and that one-stop shops are by definition a compromise. In addition, if only one discipline can survive (surely a hypothetical suggestion anyway) it must be design – as the only one able to act with clients as proud ‘parent’, rather than just the mouthpiece, of any given brand.

The first to die out?

I wouldn’t know.

If, as I suggest, the other disciplines are spreaders of messages rather than creators of brand essence and differential, then I guess it depends on how hard they continue to work to convince clients of their value.

But I’ll go for advertising because, although it is a generalisation on my part, I see an inherent and largely unmerited arrogance on the part of advertising agencies which means that they will be the last ones to see any (hypothetical) firestorm amassing on the horizon.

 

ADVERTISING

Simon Sinclair, head of chaos, Pravda Advertising

It depends what you want to call ‘advertising agencies’. If you mean the people who devise the strategy, the ‘big idea’ that will address the challenges the client faces, then the companies that provide those things will always be required. The outlets for The Idea, however – be they digital, DM, PR or good ol’ fashioned press - form an ever-changing picture. And it will always need clever strategic, creative and media minds to plan their use.

It seems facile to suggest that one or other of these outlets will never be needed again. They’ll always be part of a good agency’s armoury. And there will always be break-off specialists who try to better the mother ship’s offering in one area and nick bits of business.

Okay, so a design agency might steal an advertising brief. But if it produced a sound strategy and a big idea, it would have become an advertising agency. And it would then attract good people from other ad agencies and become a better one.

These aren’t services which have accidentally found themselves cohabiting – in the way that, say, key cutting and heel repair have. They’re all inextricable. And they’re inextricable because at the centre of them all is The Idea. And the agency at the centre of all that – whatever it’s currently fashionable to call it   – will always be that ever-evolving beast, with its ever-growing boundary, we know as an advertising agency.

Asking which one of these disciplines won’t be needed is a little like asking which part of a guard dog won’t be necessary. Its teeth are evidently more use than its legs for biting intruders, but does that mean it no longer needs legs? And just because its limbs do such a good job in getting it where it wants to go, does that mean it doesn’t need a heart or a brain?

The contention that one or other of the marketing tools will eventually triumph over the rest is an over-simplistic one. And it’s one that’s put about by the nouveau disciplines as a way of ensuring the services they offer get a larger slice of the cake. Perhaps they underestimate the survival instinct, the intelligence and the sheer inventiveness of the people within ad agencies; an industry which has survived and evolved constantly throughout every economic cycle since the 1950s.

At any given part of the economic cycle, certain services will either be breaking away from “Mother Ship” agencies or being reabsorbed into them. But clients will always need their constituent parts, whether as part of a full-service supermarket-style agency or as a series of expensive-for-what-you-get boutiques.

Granted, some agencies will die. Good ones and bad ones. But they’ll die for their own internal economic reasons, rather than the fact that the client no longer has a use for their disciplines.

However, no intelligent client would ever suggest that, no matter how sharp his or her design agency, it can do its job without a heart or a brain. Because if they die, everything else will die with them.

 

DIGITAL

Kirstie Buchanan, creative director, Reading Room

Fracture…fragmentation…splintering…No, it’s not A&E on a Friday night, but the way in which we view information. There are hundreds of media channels now, across a range of different platforms, whereas just a few years ago there were only a handful. Consumers can pick and choose what information they want to view - just like the tracks on their iPods.  And digital, with its individual-centric focus is ideally positioned to thrive in this fragmented media world.

In the new type of information society, digital offers connection, relationships, conversations and engagement.  And I’m not just talking about dating websites here - these things are all part of the offering that digital agencies are able to give to brands.

Digital offers personalised experiences for users – in this way it makes the perfect fit for our individualised society. The challenge for brands is to find a way to engage with audiences. Digital fulfils this difficult brief by delivering content that has value for the user – rather than just blasting information at them.

But beyond the fact that digital agencies are far better adapted to a fragmented information society, the digital age is simply inevitable and inescapable.  All agencies will ultimately have to become ‘digital’.  At the moment traditional agencies are failing to grasp the fundamental extent to which this is the case, thinking that they can graft digital on to their existing package. Digital is the future and it’s why the best digital agencies now – the pioneers, shapers and first adopters – are going to thrive in the years to come.

Advertising will die.

I told my friend that I was thinking of going to India on holiday.

“How about the hassle of people trying to sell things to you on the street?” she asked.

“But how is that any different to advertisers trying to flog me stuff  while I’m watching TV at home?” I replied.

I mean, life’s too short to watch adverts.  After working all day why would you invite someone into your home with a megaphone, who’s going to try and make you buy things?  That’s what we’ve been doing for years, but we’re now showing Mr Annoying Shouty-Thing the door – and Sky Plus, TiVo and BBC iPlayer have helped us to do it.  I mean, what’s in it for us?

Media is changing and our habits are changing. Advertising’s megaphone model cannot simply be extracted from its traditional context and imported into new situations.  If you stand right behind me and shout, then I’m going to jump - as far away from you as possible.

Advertising is based on telling people stuff, and then not listening to what they’ve got to say.  And this is what makes getting hassled on the street in India far more rewarding than watching adverts in my living room - at least I’m guaranteed some form of conversation, even if it isn’t one I really want to be having.

The era of advertisers bombarding us with sales pitches is dying out - and this is the reason why advertising agencies are also most at risk of dying out.

 

PUBLIC RELATIONS

Julia Willoughby, managing director, Willoughby PR

Organisations have woken up to the value of stakeholder, customer and good community relations. Reputation management has never been higher on their agenda and the role of the public relations consultant has never been stronger.

The buoyancy and growth of the PR industry has been monitored with reports like the Keynote market assessment, tracking the growth of the average agency at 10.5 percent; although the latest league tables see the successful ones increasing much more than this.

This growth is fuelled by the importance of communications across all levels... employee and customer relations, engaging and consulting communities, new approaches for ‘hard to reach’ audiences. The diversity is enormous and the communication dynamics are complex.

It is why the experienced PR consultant is of value; we can leverage the options to ensure the key messages reach the identified audiences at the right time with the right approach. Flexibility to handle various issues with different tactics is so crucial now.

With the various options to track and monitor programmes, consultancies can provide robust evaluation reports that demonstrate how the activities are making a difference.

Added to this, public relations is the vital link for all other marketing agencies, who now more than ever, appreciate its value as part of integrated campaigns.

Ad agencies doomed for extinction?

It’s advertising, but not as we know it.

It is not so much the case of dying, but successful advertising agencies have gone through a metamorphosis in the last five years. This has led to the diversification into related marketing services,including digital (just another communications channel really), direct marketing and brand development.

However, rather than predicting advertising agencies as the first for extinction, there is a much more vulnerable agency species.

It is any agency that will not change to the fast-moving dynamics of trends influencing business and the wider world.

If you cannot see ahead, innovate or problem solve, you become a dodo. The ad agencies that will survive and build are the ones who have teams that listen to clients, understand their issues and develop thoughtful, effective solutions. They are far removed from some of the arrogant, know-it-all agency types I met when I started out in consultancy two decades ago... and who strangely don’t seem to be around now.

Featured by The Drum

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